Feb 21, 2019 21:30 UTC
Feb 22, 2019 at 21:41 UTC
How Can Blockchain Technology Help The Shipping Industry?
Blockchain technology has made waves in multiple sectors and shipping is no different. If you have been reading the headlines about updates within the blockchain industry, you would very well know that tech giant IBM has also recognised the value of blockchain in shipping.
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We know that IBM, in association with Maersk, has designed a blockchain solution called the TradeLens. Earlier this year, the company was also involved in shipping oranges from China.
When a company as major as IBM steps into something, you know it is going to be big. So let us take a look at the role blockchain can play in the shipping industry. The following are some of the benefits this technology introduces to the shipping industry.
Automation of Billing Through Smart Contracts
Smart contracts in blockchain have been proving their worth in every use case one can think of, and shipping too, is reaping the benefits of the same. Shipping involves a great deal of documents, ranging from permits to bills of lading. Now, blockchain smart contracts can often help automate them.
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As a result, freight negotiation can be automated as per pre-set criteria and requisites. This can automatically reduce possibilities of errors.
By storing all relevant documents on a distributed ledger system that can be accessed by all the parties involved, the use of blockchain in shipping can substantially bring down the amount of time needed to coordinate everything.
In shipping anything, there are obviously quite a large number of parties involved. Without blockchain, it would become quite a chore to share all permits, documents with all details etc. with every single party involved. Even then, the coordinators would face issues tracking all updates. A blockchain network automatically solves that saves time.
As the saying goes: “time is money”. By saving time and bolstering efficiency, blockchain technology also makes sure that the cost of shipping also comes down.
With the use of a facilitating technology like blockchain, the costs of focusing too intently on coordinating go down. Moreover, use of smart contracts can also eliminate the need for employing middlemen, thereby cutting costs.
Increased Security and Transparency
We know that a blockchain network is quite secure because it can effectively block out unauthorized access. As a result, using blockchain in shipping can make sure no fraudulent changes or edits are made to details about inventory, provenance etc.
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